SMEs urged to go back to company cars

By Verdict Staff January 1, 2009

Turning away from company cars could be seriously bad for SMEs’ financial health.

This is the message from the head of Lombard Vehicle Management, Rob Bailey, who has advised SMEs which offer employees a cash-for-car to option to encourage drivers back into company cars, as a way of controlling – and reducing – costs.

“If you offer drivers a cash-for-car option you are probably paying considerably more than providing them with vehicles through a well structured in-house fleet,” Bailey said.

Most cash-for-car schemes, he added, were introduced at a time when financial circumstances were very different from how they are today, and he pointed to the current “buyers’ market” and taxation-based incentives to run a greener fleet as two strong reasons to go down the fleet route.

“A recent report by accountancy firm KPMG concluded that company cars produce up to 40 per cent less CO2 than those chosen by cash-for-car drivers, who frequently buy used vehicles with poorer emissions performance. A 40 per cent reduction in CO2 equates to approximately 8mpg, which would result in a saving of around £600,” he said.